Dollar stretches higher on hawkish Fed, cautious mood

Here is what you need to know on Friday, April 8: 

The greenback continued to gather strength against its major rivals and the US Dollar Index came within a touching distance of 100.00 early Friday, touching its highest level since May 2020. On top of the hawkish FOMC Minutes, comments from Fed policymakers provided a boost to the dollar late Thursday. The US economic docket will not be offering any high-impact data releases ahead of the weekend and it wouldn’t be surprising to see markets stay relatively quiet. It’s also worth noting that the first round of the French presidential election will be held on Sunday.

St Louis Fed President James Bullard argued Thursday that the policy rate would need to go as high as 3.5% to fight inflation. Chicago Fed President Charles Evans and Atlanta Fed President Raphael Bostic both noted that it would be appropriate to get to a neutral setting toward the end of the year. The benchmark 10-year US Treasury bond yield gained more than 2% after these comments and was last seen moving sideways at around 2.65%.

The United States Congress voted to revoke Russia’s “most favored nation” trade status. Additionally, the United Nations removed Russia from the Human Rights Council. Meanwhile, the Financial Times reported that the European Union foreign ministers were likely to discuss further sanctions against Russia on Monday, including a ban on oil imports.

EUR/USD stays on the back foot and trades in negative territory near 1.0860 early Friday. Since the beginning of the week, the pair has lost nearly 200 pips.

GBP/USD came under modest bearish pressure in the early European session and was last seen losing 0.2% on the day at 1.3050.

USD/CAD climbed to its highest level in more than two weeks above 1.2600 on Thursday. Ahead of the March jobs report from Canada, the pair consolidates its gains near 1.2580. 

Canadian Net Change in Employment March Preview: Is the labor market passe?

Gold stays directionless as it continues to move up and down in a tight channel above $1,920.

Following Wednesday’s sharp decline, Bitcoin stayed relatively quiet on Thursday and extended its sideways grind near $44,000 early Thursday. Ethereum closed in the green on Thursday and continues edge higher toward $3,300 early Friday.

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